Everyone likes falling interest rates, and Federal Reserve
Chairman Alan Greenspan obliged us with no fewer than two cuts in
short-term interest rates in January, a half-point drop in March
and another half point in April. So what's in it for
entrepreneurs?

The answer depends on the type of business you run and how
deeply your company is leveraged. When the price of money goes
down, customers start spending, especially on high-ticket items. So
a company selling exotic hardwood flooring might get a few more
calls, but a private mailbox service will probably see business
proceed as usual.

Whenever the Fed acts, you need to move fast if you want to take
advantage of that fleeting interest-rate high. "You want to
target customers for whom a drop in interest rates will make a big
difference," says Robert Brockhaus, director of the Center for
Entrepreneurial Studies at Saint Louis University in St. Louis,
Missouri.

Interest rate cuts don't have to be huge to make an impact.
January's total reduction amounted to just 1 percent, but Brian
Flynn, CEO of New York City-based Annotate.net, says
it sparked renewed interest from venture capitalists.
"It's an emotional thing," Flynn says. While not
likely to spur a wave of VC investment, the cuts could revive
investors' interest on a case-by-case basis.

If the rate cuts fail to squelch doomsday predictions of
recession, entrepreneurs may see their numbers growing. Economic
slowdowns have already given us laid-off employees, and, in past
recessions, many idled hands have turned to entrepreneurship to
survive. Says Brockhaus, "There's more of a push than a
pull to become an entrepreneur."